The Contribution made by Beer

to the European Economy

Romania - January 2016
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ROMANIA

ROMANIA
1. COUNTRY PROFILE

Romania 2014
Population 19,861,029
Currency Leu
GDP per capita in PPS (2012, EU28 = 100) 53
Source: Eurostat and National Statistical offices.

2. HIGHLIGHTS ROMANIA

Table 1: Economic impact of beer in Romania (2013-2014)

Romania 2013 2014 % Change
Total number of jobs 95,976 84,988 -11.4 %
Value-added (million Euro) 966 862 -10.7 %
Government revenues (million Euro) 581 533 -8.3 %
Source: Calculations - different sources.

Figure 1: Development of production, consumption, imports and exports (2010-2014)

Source: National associations.

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ROMANIA

3. BREWING SECTOR

Production fell significantly from 2013 to 2014 in Romania. Despite this, there was an increase in the number
of brewing companies and the number of breweries, with the sector becoming increasingly diverse despite
the overall reduction in volume.

Table 2: Basic characteristics of the Romania brewing sector (2013-2014)

Romania 2013 2014
Total production (in hectolitres) 16,110,000 14,750,000
Brewing companies 12 16
Breweries (including microbreweries) 18 22
Microbreweries 3 7
Source: National Associations.

4. BEER MARKET

Consumption has also fallen significantly overall along with total consumer spending, as prices remained
constant. The share of beer consumed in the on-trade is low relative to other European countries.

Table 3: Basic characteristics beer market (2013-2014)

Romania 2013 2014
Total consumption in hectolitres 16,300,000 14,900,000
Total consumer spending (in million Euro) 1,644 1,470
Consumption of beer per capita (in litres) 81 74
Beer consumption on-trade (hospitality) 19% 18%
Beer consumption off-trade (retail) 81% 82%
Average consumer price in on-trade (1 litre, including taxes) (in Euro) 1.45 1.49
Average consumer price in off-trade (1 litre, including taxes) (in Euro) 0.91 0.88
Source: National Associations.

5. TRENDS AND DEVELOPMENTS

There has been a steady shift from consumption in the on-trade to consumption in the off-trade and a decline
in overall beer consumption in line with wider European trends. The decline in beer consumption in Romania
is thought to result from a large increase in excise duty rates in 2013, which makes the market more
susceptible to fluctuations driven by other causes, such as bad weather.
Firms are responding by developing new products, particularly Radler beer mixes. Package sizes are also falling
and there is a shift to cans.

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ROMANIA

6. EMPLOYMENT GENERATED BY THE BEER SECTOR

The relatively low proportion for consumption in the on-trade means its share of the contribution to
employment is also low; around half the level typical in other Member States. The retail sector contribution is
high, reflecting a relatively labour-intensive retail sector for alcoholic beverages and a high share for off-trade
consumption. The hospitality sector also declined from 2013 to 2014 unlike in Poland, for example, where a
similarly low on-trade share is increasing over time (Romania might follow this pattern in the future).

Figure 2: Total employment because of beer in 2014: 84,988 jobs

Source: Calculations - different sources.

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ROMANIA

Figure 3: Change in employment (2013-2014): -11.4 %

Source: Calculations - different sources.

The largest contribution to employment in the supply sectors occurred in agriculture. This reflects the labour-
intensity of the sector. Around a third of agricultural supplies are imported. There was also a large contribution
to employment in the media and marketing sector.

Figure 4: Indirect employment in 2014: 24,543 jobs

Source: Calculations - different sources.

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ROMANIA

7. VALUE ADDED GENERATED BY THE BEER SECTOR

The pattern for value added is similar to that for employment, with a large retail sector contribution reflecting
the large off-trade share in overall consumption. This has declined, reflecting a decline in the value of retail
sales, while other contributions to employment have remained reasonably stable.

Figure 5: Change in value added (2013-2014): -10.7 %

Source: Calculations - different sources.

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ROMANIA

8. GOVERNMENT REVENUES RELATED TO BEER

The largest contribution to revenues related to VAT in the off-trade, reflecting the particularly high share of
consumption in the off-trade. VAT revenues are still high relative to excise duty revenues, despite the increase
in the excise duty rate in 2013.

Figure 6: Government revenues generated by beer in 2014: 533 million Euro

Source: Calculations - different sources.

Table 4: Government revenues (2013-2014)

Romania 2013 2014 % Change
Excise duties (million Euro) 154 150 -2.9 %
VAT (on-trade) (million Euro) 87 77 -11.2 %
VAT (off-trade) (million Euro) 231 208 -10.3 %
Income tax, payroll tax and social security revenues (brewing companies) (million
21 20 -4.5 %
Euro)
Income tax, payroll tax and social security revenues (other sectors) (million Euro) 88 79 -10.6 %

Total government revenues (million Euro) 581 533 -8.3 %

Source: Calculations - different sources.

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Published January 2016